According to the Ministry of Industry and Trade (MOIT), this was for the first time Vietnam had 13 export items with more than one billion dollars in revenue. The ministry believes that exports in the last four months will still be okay, but it also anticipates big difficulties.

Lacking workers and materials

Thanks to high export prices and advantages in demand-supply and exchange rates, Vietnam’s export revenue is estimated to reach $44.5 billion in the first eight months, an increase of nearly 20 percent over the same period of 2009. Most export items are likely to see revenues reach or exceed their targets.

Garment export revenue for the first eight months reached $6.9 billion, an increase of 18 percent over the same period of 2009. It is highly possible that the total export revenue for 2010 will reach $10.5 billion.

Wood furniture export revenue is $2.1 billion, up by 36 percent over the same period of the previous year. Many producers have reportedly take enough orders to ensure jobs until the second quarter of 2011.

Rubber exports brought $1.15 billion already. Though the export volume increased by only three percent, the revenue was higher by 89 percent than that of the same months in 2009.

Economists warn that exports may face big difficulties in the future, as the main characteristic of production of key export items is that it depends on import materials. Also, factories are lacking skilled workers.

Seafood processing, plastics, cashew nut processing and wood furniture production have been cited as industries most seriously lacking in materials. Nguyen Hoai Nam, Deputy Secretary General of the Vietnam Association of Seafood Exporters and Producers (VASEP), remarked now is the most difficult time for seafood processers, because nearly 100 seafood processing companies are facing obstacles with Circular 25 on examining food hygiene. He said processors are seriously thirsty for materials and the shortage may last until the end of the year, including materials like shrimp and tra fish for key exports.

Trade deficit with China looms

According to MOIT, in the first eight months of the year, the trade deficit tended to decrease. The total trade deficit during that time was $8.155 billion, equal to 18.32 percent of the export revenue, while the figure is forecast to stand at 18-19 percent of the export revenue for the whole year, which is lower than the over 20 percent levels seen previously.

Still they caution against a high trade deficit with China in 2010, stressing that the trade deficit with China regularly accounts for up to 90 percent of the total trade deficit value.

Dr. Tran Dinh Thien, Director of the Vietnam Economics Institute, said the Chinese yuan appreciation, in theory, will encourage other economies to boost exports to China. As for Vietnam, this may lead to firms increasing exports of resources to make a profit. Meanwhile, if Vietnamese enterprises must still import materials from China to produce exports, it would be unfeasible to reduce the trade deficit with China.

Over the last 10 years, China’s export revenue to Vietnam has increased by 24.4 times, from $673 million in 1999 to $16.44 billion in 2009. Meanwhile, the country’s import revenue from Vietnam has increased by 6.6 times only, from $746 million to $4.91 billion.

Source: Nguoi lao dong